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Investors interested in stocks from the Medical Info Systems sector have probably already heard of Computer Programs and Systems (CPSI) and Omnicell (OMCL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Computer Programs and Systems is sporting a Zacks Rank of #2 (Buy), while Omnicell has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CPSI has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CPSI currently has a forward P/E ratio of 12.71, while OMCL has a forward P/E of 33.75. We also note that CPSI has a PEG ratio of 1.03. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OMCL currently has a PEG ratio of 2.25.
Another notable valuation metric for CPSI is its P/B ratio of 2.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, OMCL has a P/B of 3.59.
These are just a few of the metrics contributing to CPSI's Value grade of B and OMCL's Value grade of C.
CPSI stands above OMCL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CPSI is the superior value option right now.
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Computer Programs and Systems, Inc. (CPSI) : Free Stock Analysis Report
Omnicell, Inc. (OMCL) : Free Stock Analysis Report
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